Up next in 10
The heir to the billion-pound JCB fortune has warned that the government's inheritance tax crackdown on family firms could force his father's sprawling business empire overseas.
Jo Bamford, whose billionaire father Anthony owns the digging equipment maker, said he could be forced to move abroad in order to safeguard the number of jobs at the family's portfolio of companies and prevent businesses from being sold off.
He told City AM's Alys Denby about the dangers facing family firms in the UK.
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0:00
Hello, I am joined today by Joe Bamford,
0:02
who is chairman of Hydrobee, and we are
0:04
going to start by talking about what I
0:05
know is a subject close to every CTM
0:07
readers heart, which is buses. Um, so
0:10
the government has announced uh it's
0:12
going to spend an extra 900 million on
0:14
buses over the next 3 years. Why is so
0:16
much of that money going to go to China?
0:18
It's a very interesting question. Look,
0:21
Hydrobee is my holding company and I
0:24
in there we own Wrightbus. I bought
0:26
Wrightbus in the end of 2019 out of
0:29
bankruptcy in Northern Ireland
0:31
and I walked in with five people and now
0:33
I've got 2,500 and I'm very pleased to
0:36
say that. But that's an interesting
0:37
piece, right? Um
0:40
I bought it really because I'm very
0:41
interested in energy transition, but
0:44
also long-term jobs that that work um
0:48
sorry, I'm interested in long-term jobs
0:51
that are both energy transition
0:53
and of course manufactured goods.
0:56
Look, buses at the moment we've got
0:58
about 2,000 uh
1:00
Chinese battery buses on the road in
1:02
London. And
1:04
uh
1:05
they're subsidized by the government.
1:07
Uh
1:08
We have two bus manufacturers in the UK.
1:10
Mhm. Uh I have 2,500
1:13
taxpayers in my factory. Now, if you're
1:15
using British taxpayers money
1:18
to go and buy Chinese buses to subsidize
1:22
taxpayers in China,
1:25
doesn't take you long before you realize
1:26
I'm going to run out of taxpayers to buy
1:28
the buses.
1:28
>> Yeah. Okay. And that's the reality about
1:31
it. Look, you need to buy British on
1:32
these things. You need to build up your
1:34
supply chains and and basically copy
1:37
China. Cuz China have done a brilliant
1:39
job of both on energy transition, but
1:42
also on these long-term jobs. And I've
1:45
been in China
1:47
probably 40 or 50 times in my life.
1:49
I set up factories there in the early
1:51
naughties.
1:52
And I remember being the chairman of a
1:54
big Chinese company and I said, "Well,
1:56
what are you measured on?" And he his
1:58
his answer was
2:00
"Well, I might actually measured on
2:02
happiness of people, not on profits, not
2:04
on turnover.
2:06
Full employment. How do I keep as many
2:08
people employed in this
2:11
country as we can do?"
2:13
So, if we buy Chinese buses, it doesn't
2:15
do anything for Britain. But I mean you
2:16
say that the British taxpayer doesn't
2:19
get anything about out of a Chinese bus,
2:20
but doesn't it get a cheaper bus?
2:23
Not really. Okay, and this is this is
2:25
the sort of insanity of it.
2:28
Okay, maybe 10 grand, 15 grand on a
2:31
quarter of a million to a half a million
2:33
quid bus. Uh okay, but then guess what?
2:37
Look, my competitor, this has just
2:39
happened in Scotland. The Scottish
2:40
government did something called Scot
2:42
Zeb, which said, "Right, we will fund
2:44
certain amount of buses, like two or 300
2:46
buses, we'll fund the difference between
2:48
a diesel bus and a zero emission bus to
2:50
the operators.
2:51
We'll use state funding to do that to
2:53
the operator now buy the bus like China
2:55
at the same price and we'll state fund
2:57
it." Of course, the Scottish government
2:59
went and bought Chinese buses. Alexander
3:01
Dennis have a factory in Falkirk, I
3:03
think 300 employees,
3:05
and of course they just shut it. Okay?
3:07
And that's not just 300 people in
3:09
Falkirk that directly lost, but that's
3:12
the sandwich shop probably gone and the
3:14
hairdresser probably gone because, you
3:16
know, the heart of that town goes.
3:18
And you maybe saved 10, 15 grand on a
3:20
prime mover. Okay, but you've lost, you
3:23
know, 500 taxpayers. Okay, and you're
3:26
using their money to fund those buses.
3:29
Well, pretty soon you'll
3:31
end up with no taxpayers because you're
3:33
not building it up.
3:34
>> It's a classic case of not thinking
3:35
through the trade-offs, isn't it? And it
3:37
shouldn't happen that to the Commons
3:39
level, it should happen at every civil
3:40
servant, you know, and it shouldn't be
3:42
because we're mandating, we're living in
3:45
a WTO world, but it should be because
3:47
they're embarrassed not to buy British.
3:50
You know,
3:50
those people who are buying these
3:52
things,
3:53
they're verbally taxpayers themselves.
3:56
Okay?
3:57
And they're saying to other taxpayers,
3:58
"I'll tell you what, we're going to get
3:59
rid of your job for 10 grand. Okay, but
4:02
we make more as a country if we keep
4:04
those jobs in the country."
4:06
And as you said, there's about 3,000
4:08
Chinese buses on the streets. The vast
4:10
majority of those are in London. How
4:12
worried should we be about the
4:13
technology itself? I mean, is it true
4:15
that there are sort of kill switches in
4:17
Beijing that they could operate and turn
4:20
off buses remotely?
4:23
Well, yes.
4:24
Really?
4:26
I look, I have a screen in my not in my
4:28
office, but in the tech team's office
4:31
that can tell you state of charge in
4:33
batteries. They can tell you
4:36
how heavy-footed the driver is. They can
4:39
do all sorts of stuff. Okay? So, it's
4:41
not beyond the wit of man to think that,
4:44
you know, someone in China could turn a
4:46
battery bus off
4:48
from China. Another thing.
4:49
>> In fact, we make diggers as a family. We
4:52
make JCBs. We have a factory in China.
4:55
When we used to sell the diggers in
4:57
China, um the bank that was financing
5:01
them by law had to be able to switch the
5:04
digger off. Wow.
5:05
>> Uh because if the the customer wasn't
5:08
paying finance, you had to switch it
5:09
off.
5:10
Gosh, that's really
5:12
So, do you think that they might export
5:13
that idea here? Well,
5:16
I haven't got personal evidence of it,
5:19
but like I said, I hugely admire China,
5:22
but there were certain things that, you
5:24
know, happened in their markets which
5:28
don't happen in our markets in quite the
5:30
same way.
5:31
So, we at CTM, we obviously a lot of
5:33
people, a lot of our readers, a lot of
5:34
people in Square Mile who works in the
5:35
services industry. Do you think Britain
5:38
is still capable of being a
5:39
manufacturing economy and or should we?
5:42
I find it interesting. Look,
5:44
let me give you an example.
5:48
I come from a family business.
5:50
My dad was born in a tenement house with
5:52
a toilet in the garden. My mom's a
5:53
grammar school girl from Nottingham. My
5:55
dad's 80 years old. He works every day
5:57
of the week. My mom's the largest
5:58
organic food farm in the UK. She's 80
6:00
years old. She works every day of the
6:02
week.
6:03
My grandfather started a business with a
6:05
second-hand welding kit. My grandmother
6:07
used to drive a Bedford 10-ton truck
6:08
down to London to pick up air raid
6:10
shelters. So,
6:11
this is the only way to get metal to
6:13
take back to grandpa who would then weld
6:15
them into tipping trailers and that's
6:17
how the business started.
6:20
You know, between the three of us we
6:22
directly probably employ about 15,000
6:25
people. We're private. We've invested
6:27
here long-term. We work every day. Um
6:31
and we build and manufacture here. Of
6:33
course, we manufacture in other places
6:35
in the world. We've got, you know,
6:37
in JCB I think there's 28 factories now,
6:39
Brazil and China and India and
6:42
but we're here and we're British and we
6:44
like being here. We're emotionally
6:46
attached to this country. You know, the
6:48
city is interesting
6:50
in some respects and government when
6:52
they think they're talking to business,
6:54
talk to sit the city.
6:56
There's only 2,000, roughly 2,000 listed
6:58
businesses, but there's 4.2 million
7:00
family-owned or privately-owned
7:02
businesses in the country with more than
7:04
12 employees who are vested in here, who
7:06
every day their own personal private
7:08
capital is going in that business, who
7:10
are actually emotionally attached to
7:11
their employees, who are emotional. Now,
7:14
those are the people you want to build
7:16
long-term parts of the country. Can we
7:18
manufacture here? Yes, we can.
7:21
But we need to get energy transition
7:23
right. Okay? Uh we need to decide what
7:26
we're going to do. Let me give you an
7:28
example.
7:29
If I was Ed Miliband and I said, "Right,
7:31
I need to double the grid."
7:33
I'd say, "Right, what am I going to be
7:34
good at and what am I not?" You know,
7:36
let's just say, you know, uh
7:38
we have installed capacity in the UK of
7:40
60 gigawatts of power.
7:42
Data centers have now just put in the
7:43
last six months for another 50
7:46
gigawatts. Right?
7:47
Certain components you'll need,
7:49
transformers, right? Okay? Those are the
7:51
things that you, you know, make the grid
7:53
work, right?
7:55
I think there's three or maybe four
7:57
manufacturers of transformers in the
7:59
world.
8:00
And they're on five-year lead times
8:03
today before you've put, by the way,
8:05
another 50 gigawatts on it.
8:07
Why wouldn't you as Ed Miliband or
8:09
somehow could say, "Right, I'll tell you
8:10
what, if we're going to ever attach this
8:11
to the grid,
8:12
tell you what, we'll put a tender out to
8:14
you for
8:16
the 50 gigawatts of this. Would you
8:18
please put a factory in Cumbria? Okay?
8:21
We'll manufacture them there and of
8:22
course there'll be a school next to that
8:24
factory and then the and then the
8:26
sandwich shop will then be added that
8:28
and you can incubate industries."
8:30
You know, Britain, you know, a lot of
8:32
your pension and my pension are paid for
8:34
by people like BP and Shell. They've
8:36
been here for the last 100 years. We
8:38
Britain did very well out of the last
8:40
energy transition. Yeah?
8:42
We're not going to do well out of energy
8:44
transition if we don't make the the
8:45
widgets, okay, and don't don't finance
8:48
the widgets and don't insure them and
8:51
don't do any of those things. We're
8:52
going to offshore all of that stuff,
8:54
okay, and we're we're going to
8:56
buy it from other countries.
8:58
But hollow out our own jobs. Our own
9:01
That's a bit of a silly thing as far as
9:03
I can see. Yeah, when we talk about
9:05
energy transition and obviously we're in
9:07
an energy crisis at the moment. Energy
9:08
costs are one of the reasons
9:09
manufacturing is so hard in this
9:11
country. So, I wonder what you make of
9:14
net zero policies, if you think we are
9:16
getting it right, if you think we should
9:18
be continuing to drill in the North Sea,
9:20
or are you committed to the net zero
9:22
agenda?
9:24
Look, the net zero agenda is drilling in
9:27
the North Sea. Okay, the reality about
9:29
it is if you're bringing energy from
9:31
somewhere else in the world, it's going
9:32
to be a much higher
9:34
you know,
9:36
carbon footprint shipping it over here
9:38
and drilling it there.
9:40
North Sea's got 40 or 50 years left. Use
9:43
taxpayers money, use the tax on that to
9:45
invest in areas you can be good at. You
9:47
know, I've just given the example on
9:48
transformers, but you know, we could be
9:50
very good at
9:51
nuclear and nuclear attached to, but
9:54
it's a 10, 15-year job and you want to
9:56
then drive the cost base down. We could
9:58
be good at you know
10:00
turbines but all sorts of different
10:02
things. So yes, you need to do that
10:05
because what people there isn't a simple
10:06
solution to net zero. It takes a long
10:09
time. Why? You need to get planning in
10:10
the place then you need to buy 5 year
10:12
lead time transformers then you need to
10:14
have you know I finance it. It there
10:17
isn't a simple solution to going to net
10:19
zero. It is a transition and a
10:21
transition takes time. What are we
10:23
transitioning from? Let me give it very
10:25
simply and people get very very confused
10:27
about energy okay? It's it's very
10:29
simple.
10:31
For the last 100 years we only use
10:34
energy really in three ways okay? And
10:37
think about those as three motorways on
10:39
how we move energy around. Electricity
10:41
for lighting, gas for heating,
10:42
combustion for motion. And over the last
10:44
100 years how we deliver that has got
10:46
better and better and better okay? You
10:48
know in 1925 you wanted to get petrol
10:51
you had to go to Boots the chemist to
10:52
get it cuz that's where you got
10:53
chemistry okay? Uh you know when I was
10:55
younger it was 15 15 minutes to fill up
10:57
the car now it's five okay? So if you're
11:00
going to try and replicate that and how
11:02
you deliver those and everything else
11:03
there's manufactured goods in that
11:05
there's finance in that there's
11:06
insurance in that there's also as well
11:08
the infrastructure of doing all of that
11:10
but it takes time to build all of those
11:11
because every single element in that in
11:13
that whole channel has got to cost the
11:15
same it's got to operate in the same up
11:17
time okay? You know a lot of the new
11:20
stuff we're doing doesn't have the up
11:21
time of 100 years of R&D and cost down
11:24
and everything else. So
11:26
really you've just got to look at how we
11:27
deliver energy today. I mean it is kind
11:30
of insane though if our plan is and the
11:33
world has got kind of lost in this which
11:35
is I'll tell you what let's get rid of
11:36
two motorways okay? Combustion okay and
11:39
the gas network make the most congested
11:42
the electricity network 10 times more
11:44
congested.
11:45
You just have to you should
11:47
you've all been in a traffic jam okay?
11:49
It's just going to get worse okay? You
11:51
need to work on all three okay all at
11:53
the same time.
11:55
So you mentioned your family it's a very
11:57
it's quite a political family. I
11:58
remember being at Reform Party
12:00
conference and seeing a JCB digger
12:02
there. Um I just wonder what what you
12:04
make of the state of politics at the
12:06
moment. I mean just on the energy
12:07
transition Richard Tice for example
12:09
always calls it net stupid zero. What do
12:11
you make of that?
12:14
Look I am my view on politics really
12:19
sitting here is as a businessman and
12:21
business's job is to play
12:24
what's in front of it I not be political
12:27
okay? Your job is to work with with
12:31
with all political sides.
12:35
Simply put you've got 650 MPs of any
12:38
different stripe who today as far as I
12:41
can see virtually none of them have ever
12:43
run anything okay? So how can you have
12:45
contacts to say look I I think there's
12:47
half a million people in the NHS.
12:50
I you're sitting home
12:52
and you're putting someone up there who
12:54
says I can run the NHS but I've never
12:56
had any experience managing people
12:58
hiring people or systems of any way
13:00
shape or form.
13:02
That's a problem. Okay a civil service
13:04
might do that okay?
13:08
In my in my world is you've got the
13:10
committee on climate change which Ed
13:12
Miliband listens to and the guy who ran
13:14
it Chris Stark you know is now his head
13:15
chief advisor.
13:17
Not an engineer never built anything.
13:19
Great great theorist
13:22
but you actually want people to build
13:23
stuff. Not saying that he couldn't
13:26
but maybe John Butterworth who's 64
13:28
years old he runs National Gas who built
13:30
most of the electricity interconnectors
13:32
and started out as a gas fitter might be
13:35
someone I'd go to more than someone who
13:37
hasn't had that experience um if if if
13:39
that
13:41
is the point.
13:42
Uh you know the thing about politics is
13:44
this
13:45
and and this is my a political view. You
13:48
need to live within your means. We have
13:50
a huge amount of debt. We need to be
13:51
able to reinvest in ourselves. You need
13:53
to have people coming jobs for people to
13:55
come through schools at. You need to
13:57
have universities and you need to
14:00
have the pull through of all of those
14:01
people.
14:02
And if you can do all of that
14:05
uh then you have um
14:08
the ability to
14:11
decide whether you want to be
14:14
left or right. You know the first thing
14:16
about government should be competency
14:18
yeah?
14:19
I want the potholes fixed. I want the
14:22
NHS to work. I want those things then
14:25
like I said you have the luxury to make
14:27
a you know a left wing spin or a right
14:29
right wing spin on it and you want to
14:30
live within your means to be able to
14:31
afford those those things but at the
14:34
moment as far as I can see we are hugely
14:36
political without running things well
14:39
and without thinking that we need
14:41
taxpayers we need people to have jobs we
14:43
need people to turn up uh in the world
14:46
and and engage with the world okay and
14:48
not feel hopeless about it and we need
14:51
to deliver
14:52
the functions of government well okay?
14:55
And then you can decide what you want to
14:57
do. I mean I think there was quite a lot
14:59
of enthusiasm in the business community
15:01
for Labour whether it was more just
15:03
because they were so sick of the Tories.
15:05
Um
15:06
but I'm assuming that you're not a fan
15:07
for example being part of a family
15:09
business of of the inheritance tax of
15:11
the farm tax.
15:12
Um I'm just how do you think this Labour
15:15
government is doing? Look I'm not one to
15:17
really comment on
15:20
you know Labour or Tories or or Reform
15:23
or anything else.
15:25
Like on business tax and family taxes
15:31
I just think it's a real problem okay?
15:34
You know my
15:35
grandfather started a business
15:37
he paid tax his whole life okay? Comes
15:40
to the end of his life and everything
15:41
he's made in his life that's been taxed
15:43
his whole life now he has to give 50% to
15:45
the government right? Um
15:48
didn't use you know probably didn't use
15:51
the NHS and certainly didn't use the
15:53
school systems might use the system
15:55
fine. I don't think we have a problem
15:57
paying tax I don't think there was a
15:58
problem paying tax.
16:00
But there is a problem for me when the
16:01
tax is used not used properly. Also as
16:04
well when you're handing down family
16:06
businesses or farms or any of those sort
16:08
of things quite contentious but you want
16:10
people to hold on to these things long
16:12
term. You want us to you know as a
16:14
family to invest here in Britain.
16:17
You know we have businesses everywhere
16:18
in the world we have them in India and
16:20
China and Brazil.
16:22
I'm here cuz I'm British.
16:24
I'm here and I'm employ people in
16:25
Britain because I like British people
16:27
and I like being in my part of the
16:28
community and it is normally in tertiary
16:31
towns in
16:32
in the in the countryside and that's
16:34
where I feel comfortable and happy and
16:36
and and come from happy doing what I'm
16:38
doing right? I started on the shop floor
16:40
at 16 I know half the people in our
16:42
factories.
16:43
But the moment you start saying well
16:45
I'll tell you what
16:46
I'm going to tax you at 65% everything
16:48
that you've earned that you can't hand
16:50
on to your children
16:52
could I live in another country?
16:56
I don't want to.
16:58
Where would you go?
17:00
I don't make sense in other countries
17:01
[laughter] right? But I was born in
17:03
America okay? I was born in America
17:05
because in the 70s they were trying to
17:06
nationalize our business. My grandfather
17:08
turned around to my father and said you
17:10
better go and have the children um born
17:11
in America uh in case the government
17:13
tried to take our business off you. Wow.
17:15
Okay and so
17:17
uh my brother my sister and I were born
17:18
in America.
17:20
Uh could I live in America? Well
17:21
I don't have the passport anymore my
17:23
sister does and she's American
17:25
um
17:26
quite easily become an American
17:27
business. I've lived at different parts
17:29
of my life there. Not about to I love
17:32
living in Britain I love being here I
17:34
love our factories here. Uh but I would
17:36
just say to any political party of any
17:38
stripe um
17:41
look
17:42
there's only so much you can ultimately
17:45
do and then you go
17:46
I have to go somewhere where I can save
17:50
the whole I'm responsible for my
17:51
employees I'm responsible for the
17:53
business but I'm also responsible for my
17:54
customers to provide
17:56
very good product to my customers at a
17:58
price that they want and that's
18:00
ultimately what we're trying to do that
18:02
keeps the business going. But I have
18:03
employees in China I have employees in
18:05
Brazil I have employees everywhere in
18:07
the world so I'm responsible ultimately
18:09
to the business.
18:11
I think that's quite a depressing note
18:13
that
18:14
the idea of entrepreneurs leaving cuz
18:17
you just can't run a business in
18:18
Britain. Is there anything that makes
18:19
you feel optimistic about the future?
18:22
Yeah being British.
18:23
Yeah I mean we have a wonderful country
18:25
we have a country that lots of people
18:26
from everywhere in the world want to
18:28
come and live.
18:29
Uh we should be proud of it I go around
18:31
the world I engage with
18:32
different people all around the world on
18:34
a business level
18:36
they know who Britain is they
18:38
uh you know they are
18:40
like I think dealing with us in a lot of
18:43
respects
18:44
we have shared history with a lot of
18:46
countries some of it good some of it
18:47
bad.
18:48
But yes we have a great opportunity the
18:50
great opportunity as well is on this
18:52
energy transition it's going to be the
18:53
largest real out real
18:56
the largest reallocation of capital I
18:58
think we'll see in our lifetime
19:00
we should be good at that as a country
19:02
we should be good at health care which
19:03
we're very good at and we should be good
19:05
at
19:06
AI and tech. These are big themes of our
19:09
lifetime that we're going to have to be
19:10
good at as a country sometimes we don't
19:12
do a a good enough job.
19:14
But then you need people like me who
19:16
want to do this. You know you look at
19:19
uh countries who do this well Japan
19:21
Korea
19:22
they have you know there's a Mr. Toyota
19:25
okay that owns Toyota he's the third
19:26
generation. Toyota don't just make cars
19:29
they're the largest scrap dealer in
19:30
Japan they have their own bank.
19:33
There's a Mr. Hyundai okay who sits
19:35
behind that they don't just you know do
19:37
cars they do ships they do all sorts of
19:39
stuff they know how to hire people they
19:41
build industries they own schools they
19:42
run the schools they've been a few full
19:44
through.
19:46
Uh you know one of the most successful
19:48
um
19:49
from a business point of view leaders in
19:50
the world today is Mr. Modi. They're
19:52
carrying on and taking more people out
19:53
of
19:55
out of poverty than anyone else.
19:57
But he has 20 businessmen sitting on the
19:59
other side, okay, who are Indians who
20:01
are investing in the country. You know,
20:03
they build 28 km of road a day. Wow. 28
20:07
km of road a day. Okay, because they he
20:10
said, "Right, okay, you know, Mr. Adani
20:12
or whoever the road builder is, I'll
20:14
tell you what, I need this road to work
20:16
and I need it to work and I don't need
20:17
you to mess around on cost and
20:19
everything else. I need to make it the
20:21
right cost, the right price, and
20:23
and be very good at doing it. You know,
20:25
you've got great people who can build
20:26
roads in the country, you know, and
20:28
invariably their their their customers
20:30
are very family business and quite a lot
20:31
of them have an Irish sounding surname.
20:33
Okay, but the reality about it is and
20:37
then they need to they know how to build
20:38
roads. So, why don't you say, "Look, you
20:40
go and build some roads, okay, and we'll
20:42
build up an industry behind you."
20:44
I think that is a great note to end on
20:45
and I hope that politicians of all
20:47
stripes are listening. Well, look, we
20:49
talked about buses and how Sadiq Khan
20:52
could, you know, make 7,000 or 9,000
20:56
buses cost the same. I told you what I
20:57
could do, but here's the thing.
21:00
Sadiq Khan has decided that he wants to
21:02
get rid of the Boris bus. They've come
21:04
to the end of their life and everything
21:05
else. And great, they have come to the
21:07
end of their life. They were designed 15
21:09
years ago. I happen to think they're
21:10
quite pretty, but if you don't, that's
21:12
fine.
21:13
But you know, the other thing, wouldn't
21:15
it be great, you know, I could make a
21:17
Khan bus, okay? You know, Sadiq Khan,
21:20
he's a son of a bus driver. Wouldn't
21:22
Wouldn't he like us to design him 9,000
21:24
Khan buses that his father would have
21:27
been proud to drive, okay, and they're
21:29
designed in Britain, made in Britain,
21:31
and they're zero emission and clean. I
21:33
think that would be kind of cool.
21:34
Absolutely. I couldn't agree more and I
21:36
hope Sadiq Khan is listening. Good.
21:38
Thank you so much, Jay Bhan. It's been a
21:40
pleasure talking to you.
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